Juniper Networks Sees Increased Enterprise IT, Carrier Spending

As the economic recovery takes hold, Juniper Networks (NYSE: JNPR) reports that IT buyers are increasingly flocking to its offerings, boosting both the company's enterprise and carrier segments during its most recent quarter.

Juniper this week reported second-quarter fiscal 2010 revenues that topped Wall Street expectations, showing increasing interest in the company's new networking gear. Moving forward, the company expects to continue to grow as it focuses on two key efforts: its Project Stratus converged data center fabric initiative and its Project Falcon mobility push.

For the quarter, Juniper reported revenues of $978.3 million, an increase of 24 percent over the second quarter of 2009, and net income of $130.5 million or $0.24 per share. Wall Street had expected revenue to come in at $953 million, with profits of $0.23, according to Thomson Reuters.

Juniper's networking gear is targeted at both service providers and enterprises, and both segments saw increases during the second quarter. Juniper's service provider business grew by 21 percent from a year earlier, while its enterprise business grew by 31 percent year over year.

Juniper also continued to grow its EX switch business, with second-quarter revenue for the product line coming in at $92 million. Juniper entered the switching business in 2008 and has been expanding its products and revenues ever since.

Denholm said combined revenues for the EX, MX and SRX product lines over the last four quarters exceeded $1 billion, and that the three networking platforms -- which all involved Juniper's own research and development efforts -- represent proof positive that the company's R&D investments are paying off.

Mobile, data center focus for Juniper

The earnings call also gave Juniper executives an opportunity to provide additional hints on where they stand in pursuing the ballooning market for carrier technology to handle growing amounts of mobile data as well as the market for new technologies in data center networking that focus on increased flexibility and scalability.

"Every wireless provider on a global basis is in a different stage of the migration from 2G to 3G to LTE and has their own business plan in terms of how their doing that," Johnson said. "What is consistent is that mobile Internet is growing, and it's growing because of the growth of smartphones. So we're working with wireless providers to help understand their roadmap in terms of how they're enabling solutions and the ability to carry the traffic economically."

The company is also working on what it calls Project Stratus, a converged data center fabric based on a new type of network processor that Juniper has been talking about for more than a year.

However, while executives provided a brief update on Stratus, they still shied away from offering details on actual product names or availability.

"Our Stratus project is on track," Johnson said. "We have fully verified the system features in silicon and are now moving into the system test phase for the first wave of product."